1-1     By:  Ellis                                            S.B. No. 1470

 1-2           (In the Senate - Filed March 13, 1997; March 19, 1997, read

 1-3     first time and referred to Committee on Finance; April 28, 1997,

 1-4     reported adversely, with favorable Committee Substitute by the

 1-5     following vote:  Yeas 12, Nays 0; April 28, 1997, sent to printer.)

 1-6     COMMITTEE SUBSTITUTE FOR S.B. No. 1470                   By:  Truan

 1-7                                   AN ACT

 1-8     relating to a prepaid tuition plan for graduate studies.

 1-9           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

1-10           SECTION 1.  Section 54.622, Education Code, is amended to

1-11     read as follows:

1-12           Sec. 54.622.  TYPES OF PLANS.  The board shall make prepaid

1-13     tuition contracts available for the:

1-14                 (1)  junior college plan;

1-15                 (2)  senior college plan;

1-16                 (3)  junior-senior college plan; [and]

1-17                 (4)  private college plan; and

1-18                 (5)  graduate tuition assistance plan.

1-19           SECTION 2.  Subchapter F, Chapter 54, Education Code, is

1-20     amended by adding Section 54.6252 to read as follows:

1-21           Sec. 54.6252.  GRADUATE TUITION ASSISTANCE PLAN.  (a)  The

1-22     board shall permit the purchaser of a plan other than a plan

1-23     authorized by this section to enter into a supplemental contract to

1-24     provide the beneficiary with a source of funds to apply toward the

1-25     payment of tuition for graduate studies.

1-26           (b)  A contract for a graduate tuition assistance plan must

1-27     permit the purchaser to deposit an amount into the plan not to

1-28     exceed 25 percent of each amount paid by the purchaser under the

1-29     principal contract.  The board shall maintain a separate account

1-30     for each contract.

1-31           (c)  Section 54.620(b) and Sections 54.620(d)(5) through (8)

1-32     do not apply to a contract for a graduate tuition assistance plan.

1-33           (d)  The board shall credit to each account established under

1-34     this section at least monthly the income earned by the fund

1-35     attributable to the amount in the account and shall deduct from the

1-36     current balance any amount paid out from the account.  In

1-37     determining the income attributable to the amount in the account,

1-38     the board shall take into account the appropriate proportion of the

1-39     board's costs of program administration and operations attributable

1-40     to the account.

1-41           (e)  The beneficiary of the plan may apply any portion of the

1-42     current balance in the account to pay tuition and required fees

1-43     when the beneficiary is enrolled in a postgraduate degree program

1-44     at any accredited public or private institution of higher education

1-45     in or outside of this state at which the beneficiary is enrolled.

1-46     The board shall pay to the institution the applicable amount of the

1-47     beneficiary's tuition and required fees.

1-48           SECTION 3.  Subsection (b), Section 54.631, Education Code,

1-49     is amended to read as follows:

1-50           (b)  A prepaid tuition contract for a plan other than a

1-51     graduate tuition assistance plan terminates on the 10th anniversary

1-52     of the date the beneficiary is projected to graduate from high

1-53     school, not counting time spent by the beneficiary as an active

1-54     duty member of the United States armed services.  A prepaid tuition

1-55     contract for a graduate tuition assistance plan terminates on the

1-56     10th anniversary of the date the first payment of tuition or fees

1-57     from the account is made, not counting time spent by the

1-58     beneficiary as an active duty member of the United States armed

1-59     services.

1-60           SECTION 4.  (a)  This Act takes effect January 1, 1998.

1-61           (b)  The Prepaid Higher Education Tuition Board shall begin

1-62     offering contracts for graduate tuition assistance plans not later

1-63     than the first prepaid tuition contract enrollment period after the

1-64     effective date of this Act.

 2-1           SECTION 5.  The importance of this legislation and the

 2-2     crowded condition of the calendars in both houses create an

 2-3     emergency and an imperative public necessity that the

 2-4     constitutional rule requiring bills to be read on three several

 2-5     days in each house be suspended, and this rule is hereby suspended.

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